Ministry of Finance
Several Initiatives were taken to ensure ease of compliance for taxpayers-Principal Chief Commissioner of Income Tax
Income Tax Department has taken several initiatives to ensure ease of compliance for taxpayers and encourage voluntary compliance said
Principal Chief Commissioner of Income Tax, AP & Telangana, Smt. Mitali Madhusmita, IRS while addressing the Press Conference on the "Issue of Suspicious Refunds being claimed by certain Taxpayers" at IT Towers, Masab Tank, Hyderabad today.
The Income Tax Return form has been simplified and the process of e-filing has been made seamless. The Department reposes trust in its taxpayers, as evident that no proof of deductions/exemptions claimed is required to be uploaded while filing the returns. Further, the returns are also processed expeditiously and refunds are automatically credited to the bank account of the taxpayer.
At the same time, the Income Tax Department also monitors the correctness of returns filed by the taxpayers, including the eligibility of deductions and exemptions claimed by them. During such an exercise, it has been found that a large number of salaried taxpayers of Andhra Pradesh and Telangana have claimed deductions/exemptions which are not correct, and have claimed refunds based on those deductions/exemptions. Many of the assessees work in Govt Departments, PSUs and prestigious IT companies. It is also noticed that a large number of such taxpayers work with companies based outside Andhra Pradesh and Telangana but have PAN based in Andhra Pradesh/Telangana. Many taxpayers have claimed refunds of as high as 75% to 90% of the TDS deducted by the employer.
Field enquiries suggest a trend that gullible employees get lured into claiming such wrongful refunds on the advice of intermediaries/peers, without realizing the consequences thereof. Recently, surveys on consultants/intermediaries were conducted, in which incriminating evidence about such malpractices has been found. The persons admitted to have filed large number of returns with bogus deductions/exemptions and have got refunds of substantial amounts for their clients, in return for some commission. Names of taxpayers for whom such returns were filed, has been found recorded in their documents, which have since been impounded. On being questioned, some of the clients admitted to have got wrongful refunds based on ineligible deductions/exemptions. Many such taxpayers have already filed Updated Returns and many more are in the process of doing so. Further, action against such consultants/intermediaries is also being initiated.
Under the Income-tax Act,1961 there are stringent consequences of misreporting of income and claiming wrongful deductions. The consequences include interest @ 12% per annum, penalty @ 200% of taxes and prosecution which may entail imprisonment.
However, those who have filed such claims and taken wrongful refund from the Department can file Updated Returns u/s 139 for AY 2021-22 & AY 2022-23 and deposit due taxes as per section 140B. For AY 2023-24, Revised returns can be filed u/s 139 in those cases where original return has already been filed.
Given the gravity of the situation, the Department urges all such taxpayers of Andhra Pradesh and Telangana States to reconsider their claim of deductions and exemptions made in the returns filed for AY 2023-24, AY 2022-23 and AY 2021-22 and to expeditiously file Updated/ Revised returns, as applicable, if claims made by them are unsubstantiated.
For any query/assistance, the taxpayers may contact the Aayakar Seva Kendras in the local Income Tax Offices or consult www.incometaxindia.gov.in or call helpline number 18001030025/18004190025. A video on how to file Updated Returns is available on Youtube, for guidance. The weblink is https://www.youtube.com/watch?v=Vp3uNSULHtA.
The senior officials of the Income Tax Department from Hyderabad, Vijayawada, Vishakhapatnam and Tirupati also participated virtually in the Press Conference.